Dish Network Will Keep 1,500 Blockbuster Stores Open

Here’s what will be left of the video rental chain that Dish Network bought for $320M. For reference, Blockbuster had 4,255 domestic stores in 2006.

MCKINNEY, Texas, July 21, 2011 – Blockbuster L.L.C. announced today it has assumed contracts with property owners nationwide and will maintain operations of more than

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Coinstar Shares -10.5% In After-Hours Trading As Redbox President Mitch Lowe Leaves For “Other Interests”

Coinstar shares are down nearly 10.5% in after-hours trading as the company coupled this surprising announcement with an early release of financial data that’s lower than Wall Street expected. The owner of the Redbox $1-a-night DVD rental kiosks says that next … Read More »

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UPDATE: What Will TiVo Do Next? Dish Network’s $500M Payment Is ‘Far Less’ Than Expected

UPDATE-WRITETHRU: How long will it take before Wall Street’s cheers for TiVo CEO Tom Rogers turn into catcalls? The Street applauded the former lawyer and NBC cable big shot today following TiVo’s agreement to settle a seven-year patent dispute with Dish Network. TiVo shares were up 3%, to $9.86, after the satellite company’s cunning billionaire CEO Charlie Ergen agreed to pay TiVo $500 million. Dish made the payment so it could continue to provide its customers with DVRs that do things TiVo says it invented –  including record one show while users watch another. Rogers says that means TiVo can pretty much insist that every DVR provider fork over a license fee. TiVo has already charged Microsoft, Motorola, Verizon, and AT&T with patent infringement. “The precedent is set” in TiVo’s favor, Rogers says as he vows to “aggressively enforce our intellectual property” rights. But TiVo is a DVR provider, not a law firm. And its core business is growing weaker each year. It had about 2 million subscribers in January – down from its peak of 4.4 million in January 2007. It has also consistently lost money for the last two years. Rogers continued to charge hundreds of dollars for DVRs capable of integrating Web video with conventional TV shows at a time when most consumers were satisfied paying about $10 a month for the simple, if often badly designed, DVRs that their cable or satellite providers offer. Meanwhile, Rogers’ pals in the cable  industry let him down. Beginning in 2005 he cut deals with Comcast, Cox and others: They agreed to give TiVo about a buck a month for each subscriber willing to pay an additional fee to have TiVo’s user interface on their DVRs. But that strategy has been long on press releases and short on results as cable companies complained about how difficult it is to integrate TiVo software into their set-top boxes. As a result, all TiVo has are its lawsuits. It recently borrowed $150 million, mostly to ensure that it would have enough cash to keep the court battles going.

Although Ergen blinked first in his standoff with TiVo, he may have outsmarted Rogers by dragging the case out as long as he did. Bernstein Research analyst Craig Moffett says that Dish’s $500 million payment was “far less than we expected.” Dish, which has 14.2 million subscribers, no longer has to worry about a court order that would force it to turn off all of its DVRs. “That would have been a knock-out blow,” Ergen told analysts. And Dish now can count on TiVo’s help as the satellite company figures out what to do with Blockbuster, the bankrupt home video chain that Ergen just bought. TiVo is one of the few Web devices that offers its subscribers the movies that Blockbuster transmits through its video-on-demand service. “I hope we win the war, and that TiVo wins the war,” Ergen says. But investors seem more optimistic about Ergen’s prospects than they do about Rogers’. Dish shares were up nearly 19%, to $29.79 on Monday.

PREVIOUS, MONDAY AM: Dish Network CEO Charlie Ergen blinked first: The satellite company said Monday morning that it has agreed to pay TiVo $500 million to settle their long-running dispute over who controls key patents to the DVR. The agreement appears to strengthen TiVo’s hand in lawsuits against Microsoft, Motorola, Verizon and AT&T over whether DVRs that they’ve built also violate TiVo patents. TiVo says it controls the technology that enables DVRs to do things like record one show while the user watches another. But if Dish had lost its case in court, then it would have been at TiVo’s mercy: The DVR company could have demanded that Dish either pay a huge license fee, or turn off service to its customers’ DVRs.

TiVo and Dish now say that they plan to work together at Blockbuster, the bankrupt home video retailer that Dish just bought for $320 million. Although Ergen’s light on details, he says that the TiVo will “help develop our Blockbuster service.” Ergen is thought to be interested in using Blockbuster’s brand name to develop a service that would challenge Netflix in streaming movies and TV shows vis the Internet.

TiVo CEO Tom Rogers says that the agreement “demonstrates the significant return affording to our shareholders by diligent enforcement of TiVo’s  property rights. Those efforts will aggressively continue with other parties.”

There’ll be more to come: TiVo will discuss the settlement in a conference call at 9 AM ET. Dish has a scheduled call to discuss 1Q earnings at noon. Read More »

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Hollywood Could Decide Blockbuster’s Fate, Dish Network CEO Charlie Ergen Says

Dish Network CEO Charlie Ergen — once tossed out of a Las Vegas casino for card counting — was poker-faced again on Monday in discussing his plans for Blockbuster. In a conference call with analysts he wouldn’t say whether he’ll … Read More »

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Bankruptcy Court Approves Blockbuster Sale

Mike Fleming

Despite the objections of 111 parties including plenty of creditors, U.S. Bankruptcy Court judge Burton Lifland approved Dish Network’s $320 million offer for the beleaguered vid chain. According to Bloomberg.com, the deal assumes $11.5 million in debt to studios.

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Blockbuster Bankruptcy Shows Danger of Being Inflexible In Digital Age

By | Thursday September 23, 2010 @ 8:18am PDT
Mike Fleming

Blockbuster made it official today, filing its long expected Chapter 11 bankruptcy, with a line of creditors that includes its product suppliers like Fox, Sony, Universal, Warner Bros and Disney. It seems unfathomable that given Blockbuster’s supremacy at one time–think of all the mom and pop video stores that went … Read More »

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